Why Is Honda CR-V Kicking Compact Crossover Butt?
March 31, 2008

By Kate McLeod

It’s not often any competitor gets to kick Toyota’s darling butt, but Honda is doing it with its compact crossover CR-V.

Last month, as overall U.S. vehicle sales declined 10 percent, Honda chalked up 15,694 CR-V sales, up 11.4 percent from a year ago February. The combined increase for the first two months of 2008 over 2007 — 14 percent — is a continuation of a record year for the CR-V, which sold almost 220,000 in 2007 making the it the best-selling SUV in America, a spot long-held by the Ford Explorer. Meantime, Honda reports March sales Tuesday.

That’s not all. The CR-V gives away only $144 in incentives and it flies out of the showroom in 18 days, making it the fastest-selling vehicle in the hot small-crossover category.

For comparison, the next best-selling vehicle is the Toyota RAV4, with sales of nearly 173,000 last year. The RAV4 gives away $143 in incentives but stays in the showroom for 10 days longer than the CR-V.

The Jeep Liberty, by contrast, sold fewer than 100,000 and gives away $4,884 each in incentives as the vehicles languished in the showroom for 100 days. This is pretty much the story with all of the CR-V’s competitors. Incentives on the Saturn Vue are $2,212. Ford gives away $2,324 on the Escape and Chevrolet discounts the Equinox $2,239 and those vehicles don’t sell at anywhere close to CR-V numbers.

Source: Edmunds.com

"This is an automaker's dream," said Jessica Caldwell, auto analyst for Edmunds.com. “Low incentives, high sales, and a low number of days-to-turn. What more can one ask for?”

What indeed. The CR-V has gained sales steadily since its debut early in 1997 even as the category became more crowded. The CR-V, along with the Ford Escape, was one of the first in the segment. Not all of Honda’s vehicles are doing as well. The Civic, Fit and Pilot are up but the Accord, Element, Odyssey and Ridgeline are down or running about even with last year.

What’s the magic dust? AutoObserver spoke to Christina Ra, who was the CR-V's senior product planner, about its success.

“The first thing we do when a model launches is start research for the next generation," said Ra. "So in 2002 when we launched the second generation, we immediately began to look at who was currently buying our vehicle and who was buying the other vehicles in the segment.

“The CR-V really, truly has always been very attractive to females and we focus on that very heavily. We found that men love it to — maybe even more than women but we focused on the woman’s level of comfort in terms of reaching the radio and climate controls, the gas pedal, things like that.

"Our research showed that we were selling to females who were either in the planning stages or the process of having a family. They need more utility but they are not looking for a truck. The CR-V is just the right size. For example, the height (66.1 inches) is right for an average-size female to get the baby in and out of the vehicle. The rear doors also open to a 90-degree angle.

"Then the vehicle has great maneuverability and drivability. We kept on asking if there was anything they didn’t like about the vehicle. They said the styling just was OK but they were very neutral about it.”

In 2007, for the third generation, Honda went for better styling combined with the utility this younger female needed. The carmaker top-hinged the rear hatch for easier cargo loading, added a rear cargo shelf for two-tier storage, widened the rear-door access, re-tuned the suspension for more agile handling and added 17-inch wheels.

“We thought about how we could attract some of the buyers from the luxury segment,” said Ra. "There wasn’t a mainstream brand that combined that scoopier styling, which is what luxury makers were going for, with the practicality.

“Part of the reason you are seeing the sales growth is because empty-nesters like the vehicle for the same reasons that the younger female does. They like easy access and plenty of storage because they’re traveling. Older buyers can afford and want more luxury so we added the EX-L to the product offerings." (The mommy model costs around $21,000; the geezer model can run up to $28,000 with navigation.)

"That trim line offers leather seats, keyless entry, alloy wheels, moonroof and upgraded stereo," Ra said. "Some of that growth is coming from the fact that a lot of older people are downsizing and the CR-V is attractive and efficient.”

Most of these compact crossovers have a plain, two-box look — no curves, really. Somehow the CR-V designers played with the windows so the little wagon looks curvy, even sleek — better-looking that any of its competitors. It’s a neat trick.

Honda seems downright prescient in not offering a 6-cylinder engine, as some of its competitors do. People are downsizing, not necessarily to get away from a six-cylinder, but to get away from a larger, pricier vehicle.

But, said Ra, “Honda is an engine company and we are good at getting more power out of a smaller engine.” The 2007 remake boosted performance of the four cylinders slightly, to 166 horsepower and 161 ft-lbs. of torque. It gets 20 mpg city/27 highway, not even the best mileage in the category. But those record sales numbers prove four cylinders are just what buyers want.

With a winner on its hands, what does Honda do for an encore? “We’re in the second year of the CR-V’s cycle,” said Ra, "which for Honda is about five years. The research phase is in full gear right now and decision-making hasn’t begun. But the environment and the conditions of today’s economy are much less predictable. It’s a heavy question what to do with it next. Styling doesn’t last forever. People are extremely happy with the size and the ergonomics, so what changes might happen are to be determined."

Interesting. This isn’t the roomiest vehicle in the class; it doesn’t have the best gas mileage; it has a smaller gas tank, which means more stopping for gas; and yet it keeps on truckin’ (well, so to speak). So yes, what comes next will be a big decision.

Then there’s that old saw to consider: “If it ain’t broke, don’t fix it.”

Photos by manufacturers

1 — 2008 Honda CR-V
2 — 2008 Toyota RAV4

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